Almost one in five (18%) of those retiring in 2012 will be in debt, with 51% of that number owing on their credit card or mortgage, according to a report released by Prudential earlier this week.
The report suggests that the average debt of those retiring in 2012 will come in at £38,000, with debt repayments costing an average of £260 a month, amounting to around one fifth of their expected income.
25% of those surveyed say that they will need to make repayments of £500 or more on a monthly basis. Eight percent believe they will never be able to pay off their debts.
Although the figures suggest that the number of individuals retiring in debt has remained broadly similar to figures forecast for 2011, high levels of debt on retirement could signal poor financial planning for later life.
According to the Department for Work and Pensions (DWP) the rate of those saving for a pension has dropped significantly across the last decade with just 38% making provisions through a private pension scheme.
It is hoped that coming changes to pension law, including the introduction of auto-enrolment could be a vital step to encourage saving. Pensions Minister Steve Webb said in a statement earlier this month:
"With fewer people saving into a pension, lower annuity rates and an average of 23 years in retirement, many people could face a poorer future in their later lives.
"We simply must put a stop to this trend and get people saving. Automatic enrolment, beginning for the largest employers later this year, will get millions of people saving, many for the first time."
Prudential's Vince Smith-Hughes, said:
"With a manageable repayment programme in place, debts need not become an issue for this year's retirees.
"Retiring with outstanding debts could be a sign of a lack of financial planning. It is important therefore for those still at work to save as much as possible as early as possible, and to consult a financial adviser to help them plan for a comfortable retirement."